PSD2: Getting Ready For The Next Generation Of Payment Services (Part 2)

The EU Commission's long-awaited proposals for a new Payment Services Directive (PSD2) contain much for existing providers of payment services to consider. This is in addition to the changes which will bring many new players into the regulatory sphere for the first time (as highlighted in Part 1 of our commentary on PSD2).

The Commission's assessment of the 2007 Payment Services Directive (PSD) was that it was generally fit for purpose but that there was much more that could be done in order to improve European payment systems. It has 5 main objectives:

to achieve a more integrated and efficient European payments market to create a more level playing field for payment services providers to ensure high standards of consumer protection to encourage lower prices for payments and to facilitate the emergence of common technical standards and interoperability. The Commission is proposing a dual approach: PSD will be repealed and replaced by PSD2; and new regulations will be introduced covering interchange fees for card-based payment transactions (IF Regulations). Key points include:

Controls on interchange fees and surcharging

Interchange fees (where a retailer's bank pays a fee to the customer's bank when a credit or debit card is used to make payment) will be capped at 0.2% for most debit cards and 0.3% for most credit cards. The Commission's concern with...